Government Procurement and Financial Reporting Quality

• Other Authors: He, Zhijian Chris (author)
• Format: Others
• Language: English
• Published: Florida Atlantic University
• Subjects: Government purchasing; Financial statements; Government contractors
• Online Access: http://purl.flvc.org/fau/fd/FA00013438

Government spending is essential for the US economy, and the amount of capital that flows from the government to US firms has increased substantially in recent years. Despite the economic importance of the corporate-government contracting relationship, we know little about the firm-level financial outcomes associated with government contracts. In this study, I investigate whether the corporate government contracting relationship affects firm-level financial reporting quality. Using a sample of 58,988 US publicly-traded firms from 2001 through 2017, I find that federal government contracting firms are associated with a lower level of discretionary accruals, lower probability of internal control material weaknesses, and lower probability of restatement and fraud as compared to non government contractors. However, this association is weaker when industry competition on government contracts are lower, and government switching costs in which the cost to find new suppliers are higher. Collectively, my empirical results suggest that having the government as a customer has a positive impact on the quality of financial reports. === Includes bibliography. === Dissertation (Ph.D.)--Florida Atlantic University, 2020. === FAU Electronic Theses and Dissertations Collection